Online estate plans and document “kits” are all the rage these days.  They typically appeal to people who are looking to save money and at least get something in writing should they pass away.

I’ve actually worked with quite a few of such people in my own practice, namely when their DIY plan backfires and fails to protect their loved ones in a true emergency. 

It’s no secret that budget estate plans notoriously fall apart and set well-meaning people up for a nasty TRICK, instead of a treat, when the unthinkable happens.  And the worst part is that it often costs families far more to fix these mistakes than it would have to work with an attorney in the first place.
Remember, the purpose of an estate plan is to make sure that there are no surprises, oversights or loopholes waiting for your loved ones if you should pass away or become incapacitated for any reason.

A generic estate planning kit may help you decide who should get what if you die, but will it shield your assets from nursing homes or the state if you ever become disabled and need long-term care?  Will it guarantee that your kids will be raised by the people you want, in a way you want, if the unthinkable happens?  Will it ensure that your hard-earned money is immediately available for your loved ones rather than being tied up for months or even YEARS in the probate court?

In the majority of cases, the answer to these questions is NO, causing much pain, sorrow and chaos for families in the midst of a crisis situation. 

Don’t let your family find an unexpected TRICK in your estate plan if tragedy strikes.  At the very least, have your DIY plan reviewed by an Orange County will and trust attorney so you know what exactly it does and does cover should you pass away or become incapacitated during your lifetime.  The financial and physical security of your family depends on it.

Laws that dictate who gets what in the event that a person dies without a will are called intestacy laws.  Intestacy laws vary considerably from state to state.  Generally, however, if you are survived by a spouse and children, your assets will be split between them.  If you’re single with no children, then a judge will allocate your estate to your blood relatives in accordance with its interpretation of the law.  In some cases, that could even mean your assets will pass on directly to the state itself!

Wills for People with Children

Having a will is especially important if you have young children, since a will is the easiest way to designate a guardian for your children, in the event that one is ever needed.  Choosing a guardian is certainly a choice that you should make while you can—right now—rather than letting a judge do it later, when you will have no control over the decision.  (Ask us about our Kids Protection Plan® for a comprehensive package to protect your children.)

Amending Wills

Wills can be amended at any time.  In fact, it’s a good idea to periodically review your estate plan.  Even if nothing changes in your life, laws often do change!  And it’s absolutely essential that you review your plan after any change in marital status. It would be a crying shame (at least in some instances) to pass away and leave everything to a former spouse.  Sound ridiculous?  It happens every day.

When you review your will, it’s also important that you review the beneficiaries you’ve designated for your 401(k), IRA, pension plan, and life insurance policy.  Those policies, plans, and accounts get transferred to the named beneficiaries automatically upon your death, so make sure they are up to date.  It’s the only way to be absolutely certain that your wishes are fulfilled.

Wills and Trusts Work Together

Wills and trusts are not alternatives to one another.  Rather, they should be used together to formulate a comprehensive estate plan.  A trust is a legal construct that lets you put conditions on how your assets are disbursed after you die, and trusts often serve to let you minimize or even completely eliminate gift, estate and probate taxes.  Even if you have a revocable living trust holding and owning most of your assets, you still need what’s known as a pour-over will.  In addition to naming one or more guardians for your children, pour-over wills ensure that all the assets you intended to put into the trust are eventually transferred to the trust, even if you forget or otherwise fail to title some assets in the name of the trust before dying.

Any assets that are not titled in the name of the trust are subject to probate and the discretion of a judge.  As a result, if you haven’t specified by will who should get those assets, a court may decide to distribute them to heirs that might not have been your first choice!

Let Us Set You Up With an Estate Plan

If you’d like to learn more about estate planning, call our office today to schedule a time for us to sit down and talk.  We normally charge $750 for a Family Wealth Planning Session, but because of the importance of having a properly formed will and revocable living trust, I’ve made space for the next two people who mention this article to have a complete planning session at no charge.

The next step in the process is to determine where you want your assets to go after you die.

It is important to take into consideration both your life situation and relationships now, as well as the possibility that they might change in the future. There are countless scenarios that could occur over the course of your life. Here are just a few to consider:

• You may not have children at the present moment, but you plan on having kids and know that you would want them to inherit your assets.
• Suppose you are married but not planning on having children – if your spouse were to pass away before you, to whom would you want your money to go?
• If you were to pass away tomorrow, are your children or heirs capable of responsibly handling their inheritance?
• Would you want to make sure a portion of your estate was left to your children from a previous marriage, rather than everything going to your current spouse?
• Do you want to leave a portion of your estate to a charity or non-profit organization?
• Do you have sentimental objects that you want to give to a specific person in the family?

One easy way to help you decide who you want to inherit your belongings is make a list of all of your assets and place a name beside that asset. This will help you get clear on your wishes as well as identify any roadblocks you might encounter in leaving assets to the beneficiaries of your choice.

For example, you might want to give the little cabin by the lake that your nephew enjoys each summer to him, but unless you put it in writing, there is no guarantee that he’ll get it. Did you put your ex-wife down as the beneficiary on your life insurance policy before you divorced but have yet to change it? Your new wife or kids from your new marriage could see nothing.

Turning this new list into an actual estate plan is where an experienced Orange County estate planning attorney comes in. We can help you take this portion of the plan and turn it into a complete guide for your family members upon your passing. Here at Morgan Law Group, we are fully committed to helping you make end-of-life decisions as easy as possible. Call us today at (949) 260-1400 for your free consultation.

The next step in our series on estate planning is to determine what type of plan you will need.

Is a living trust the best option for you and your family? Can you get by using only a simple will? What about a medical power of attorney or living will?

Many factors go in to deciding what estate plan best suits your needs. When you sit down to make this decision, be sure to address the following:

- Age

- Marital status

- Children, including whether or not your child has special needs

- Whether or not you have a blended family, or share joint custody

- If no children, who your heirs or next-of-kin would be

- The amount of assets you own

- Any business interests you are involved in

- The anticipation of any large inheritances

- Owning of property in more than one state

- Large retirement accounts or life insurance policies

- Whether or not you have very specific instructions for distributing special possessions to loved ones

Once you compile this information, it may be difficult to know exactly what to do with it and how the information relates to the overall estate plan. If you have more questions or would like a free consultation to begin your estate plan, contact me, your neighborhood Orange County trust attorney by calling (949) 260-1400. Spending the small amount of time and money now to establish a secure plan can save months or possibly years of time for your loved ones after you are gone.

When most people think about estate planning, they envision meeting with an Orange County wills and estates lawyer to plan for their death.  However, a good, comprehensive estate plan covers so much more than just planning for death, as it should also include provisions to protect your family, assets and wishes in the event of short or long-term incapacity.

Incapacity can be a result of an accident where you are no longer able to care for yourself or it can be the result of the natural aging process. Diseases like dementia and Alzheimer’s can come on quickly and often rob senior citizens of their ability to make decisions and care for themselves. And sadly, at that point, someone is forced into the position of taking over for the ill person, which is much more difficult if the person has passed the point where they can no longer manage their affairs.

In situations where a person has not put a plan for incapacity in place, it may be necessary to petition the court for guardianship and conservatorship of their estate.  However, conservatorship and guardianship are only granted by the court when there are no less restrictive alternatives available and is really only considered a last resort.  Plus, the burden of ‘proving’ incapacity often falls on the already over-burdened, over-worked, stressed-out and emotionally-drained caregiver, thus making it a painful road for all parties to travel.

My heart sinks when I get a call from someone who says that their mother or father is at the point where they need someone to take over their affairs.  I’m further surprised by the number of people who only realize this after their loved one has been taken for lots of money by scammers who prey on vulnerable people. 

Recently a client of mine and told me that her mother had been handling her own affairs – long passed when she should have.  It seems that her mother had accidently written a check to the gardener for $800 instead of $80!  Needless to say, by the time it was discovered, it was too late.  The money was never returned from the gardener.

At any rate, once incapacity is discovered, it’s now up to the caregiver to gain access to their loved one’s bank accounts, investment accounts, and other sources of income—in addition to figuring out how to take care of them on a daily basis.  Decisions like having the person live in a nursing home or whether to hire in-home care service is also incredibly difficult emotionally; especially if you’ve never discussed this with your loved and you have no idea what they would have chosen for themselves.

Yet as an Orange County wills and estates lawyer, I want you know that these situations are entirely avoidable.  With a bit of advanced planning, you CAN put a hedge of protection around your assets and your loved ones so you aren’t taken by surprise if incapacity suddenly occurs.   Simply mention this article and schedule your own Family Wealth Planning Session (normally $750) and I will show you how.  I have room for 10 free consultations each month so call our office at (949) 260-1400 and make sure you get one of them.

I recently met with a family who had been burned. Big time.  They knew that, as a young family with two small kids and a Stay-At-Home mom, they needed life insurance. Problem was, they didn’t  know anything about life insurance or what they really needed.  The person they turned to sold them life insurance that had a small death benefit and a huge premium.   It was totally wrong for their needs.  They sunk about $15,000 in to this life insurance and then had to stop, because they couldn’t make the huge monthly payments.  (The dirty little secret?  The kind of insurance he sold them gives the biggest commission to the insurance salesperson.  He had to know that he was selling them the exact wrong thing… but he didn’t care, because he got a bigger paycheck out of it).

So that $15,000… gone.  And now they have no life insurance at all, which is really scary.

Now they know they need an estate plan… but they have two obstacles. First, they have “trust” issues… they are scared to put their faith in a professional again, only to be sold a piece of cr*p that isn’t right for them by someone just out to take their money.  Second, they can’t really afford it. They are living paycheck to paycheck and they spent most of their life savings on this bogus insurance.

What to do?

Well, first off, every family needs a trusted advisor that they can turn to, to get their legal and financial questions answered.  Yes, that means you too!  Luckily, these people have found me.  And they can get to know me, so they can get comfortable that I’m the “real deal” before they put their faith in me.  Second, well, because I am the real deal, I’m willing to put my money where my mouth is. I’m in this for the long-haul with my clients.  And I know this planning is super important – more than you even know- and so we work with families to make it happen, even when you think you can’t afford it.  Call me and we can talk more about it.

You see, an estate plan is just like a car or house; it needs regular review to make sure that it stays in good working order.  There are just too many things that impact your estate plan.  You should consider your estate plan something that ages and something that requires care and tending.  Here are just a few reasons why your plan may need to be updated:

•    You’ve given birth or adopted a child.
•    Someone you’ve named in your plan passes away.
•    You’ve added or sold a significant asset.
•    You’ve changed your mind about who you want to raise your kids.

Life keeps us so busy that even if one of these events occurs and you remember that you need to change your will or trust, very few people actually take the time to do so.

This won’t happen to the clients of the Morgan Law Group.  One of the many benefits that our clients receive is that they will be reminded at least every three years that their estate plan must be reviewed.  We do this review free of charge and, most importantly, we remind you when it is time.  Your plan is simply just not going to get old or stale.
If you had your estate plan done at another law firm, you should contact them and ask them about their process and ask how they are ensuring that your plan will work in the way you planned when it was created.  If they don’t have an answer for you, contact us to see if you are eligible for a free review of your existing plan.  We’ll be happy to take a look and make sure that your family will be taken care of no matter what.

This may surprise you, but without hesitation I can tell you: most estate plans are in grave danger of failing.

Why do I say that?

There are many reasons actually, but what I see the most often is that people have not changed the title of all their assets, including real property, bank accounts, stocks & business interests, into the name of the trust.  This is called “funding” the trust. Your trust will not work unless it is funded.

To make sure your trust remains properly funded, to avoid probate and to ensure your plan works the way it was intended, it is a good idea to review the titles to your assets at least once a year.

Questions to consider are:

• Did you buy any real estate, stocks, bonds or other investments during this past year and, if so, is the asset titled in the name of your Living Trust?  (Refer to your Living Trust Identification Card or your trust document for the correct legal name).
• Have you acquired any other assets with “title certificates,” and are the titles in your name as Trustee?
• Did you purchase any life insurance or annuities? If so, are the beneficiaries properly designated? (Please call us if you are unsure).

Common Funding Errors to Avoid:

• Assets are not transferred into the name of the trust
• Assets that were purchased after the creation of the trust are not transferred
• Assets “drift out” of the trust (i.e. during a refinance)

Funding Services That Make Us Unique.

We walk each of our clients step-by-step through the transfer process so that they know how to transfer title to their assets into their trust. We prepare the deeds to transfer California real estate to the trust, coordinate deed preparation for out-of-state properties, and coordinate with your Financial Planner and CPA throughout the process.  We give clients a Funding Toolkit and then offer as much guidance as needed to make sure that they get their assets properly titled into their Trust.

We also offer our Wealth Plan where we do it all.  Some busy families want the least amount of personal effort and the greatest amount of convenience and care.  We will prepare an asset spreadsheet confirming what is owned and how title is held and then complete all of the forms and requests necessary to transfer every asset and designate every beneficiary for the maximum  protection of their family and their assets.  This asset spreadsheet is invaluable, as it can be updated over time.  It is also a helpful tool for families in a time of crisis—so they can easily navigate  their loved ones financial and legal affairs, knowing exactly what assets are owned and where they are located.

If your child’s other biological parent is living and you share custody, your children will automatically be raised by the surviving parent, unless there is some clear reason why that should not happen. There is nothing you can do about this other than stay alive at all costs!

Unfortunately, you don’t have control over such things.  So, the next best thing is to name your own guardians and leave instructions so that if something happens to both parents, your wishes for the care of your children will be known.

Also, it is crucial to nominate first responders and provide clear instructions so that there will never be a question as to whether your children should be taken into child protective services if something happens to you.

Finally, if you are a single parent and your child’s other parent is living, you must speak with an attorney about protecting the assets you leave for your children, especially if the thought of your ex handling the assets you leave behind for your children makes you shudder.

If you are parenting your children with a partner who is not biologically related to your children, creating a comprehensive plan that protects your kids is vital because you want to ensure that your partner will be able to care for your child if something happens to you. In addition, you will want to have a “Medical Power of Attorney” giving your partner authority to make medical decisions for your child if you are unavailable.

Do not make the mistake of failing to plan just because your children would automatically go to their other parent in the event of your death or incapacity. It’s just the opposite: you have even more of a need to plan -you want your wishes for your children to always be known and never forgotten.

If you are a single parent raising your children alone, you can complete your own plan, and sign documents alone.  If you are on friendly terms with your children’s other biological parent, then you and your partner/ex should each complete your own plan and sign documents that will provide for the same outcomes if something should happen to you both.

1. Do you prepare a comprehensive plan for my kids’ care if something happens to me, like the Kids Protection Plan™ that names short and long‐term guardians and gives specific instructions to all of the guardians and my caregivers? What about an ID card for my wallet listing the short‐term guardians with their contact information?
2. Are all of your fees flat fees? What about for ongoing work after the initial completion of my estate plan documents? What happens when I call with legal questions 2 years after my planning documents were completed? What if the questions are about something other than my estate plan?
3. Do you have a whole team in place or is it just you? What happens if something happens to you or you retire?
4. What happens if I need to get a quick question answered and you are not available?
5. Do you make sure my assets are titled in the right way? How?
6. What happens when things change in my life? Do you notify me about changes in the law? How often do you communicate with me?
7. Does my planning fee include a regular review of my plan? What if I want to make changes to my plan?
8. Do you have a process for helping me capture and pass on my intangible wealth, such as my intellectual, spiritual and human assets or who I am and what’s important to me?
9. Can you structure my estate plan so that whatever I leave to my kids will be protected from a lawsuit against them or if they are divorced in the future? How often do you build that kind of planning into client’s plans?
10. Can you help me make smart choices about things like buying insurance, saving for college, and retirement planning?

Knowing the answers to these questions before you engage an estate planning lawyer will ensure you put in place an estate plan for your family that will really work when your family needs it and won’t end up just a pile of worthless paper after you are gone.